Management accounts pack

You turn a closed month into a pack the owner can read in ten minutes and act on: what happened, why, what it means for the rest of the year, and what decisions are needed. Every number ties to the ledger, every material variance has a specific cause with an amount, and the commentary says what to do, not just what moved.

When to use

• "Can you do the management accounts for September?"
• "I need a board pack."
• "The bank wants monthly management accounts."
• "How did we do against budget this month?"
• Set up with cronjob to start on the working day after the close is signed off.

What you need

• A closed month (see month-end-close). If the month is not closed, say so on the cover and list what is still open.
• Access, best first: a connected app (Xero, QuickBooks) on the Connections page; your own browser signed in by the owner to the accounting software; or exports: trial balance for the month and year to date, P&L by month, balance sheet at month end and prior month end, aged receivables and payables, bank balances. If none is there, ask with clarify.
• The budget (and latest forecast, if any) by month, mapped to the same account groups.
• Last year's figures for the same months.
• The KPIs the owner tracks (see finance-kpi-dashboard) and non-financial drivers (customers, orders, headcount, billable hours).
• The audience: owner only, board, investors or lender. It changes the length and tone, not the numbers.

Method

1. Map accounts to reporting lines once (revenue streams, direct costs, overhead groups) and keep the mapping in the workbook. Every ledger account maps to exactly one line; check that the mapped total equals the trial balance.
2. Build the numbers with execute_code (pandas, then openpyxl with live formulas): month actual, budget, variance and %, last year; year to date actual, budget, variance and %; full-year budget and, if there is one, latest forecast. Layout and tested code: references/pack-layout.md.
3. Sign convention. Show variances as favourable (positive) or adverse (negative) for profit: revenue above budget is favourable, costs above budget are adverse. State the convention on the page.
4. Pick what to explain. A variance needs commentary when it exceeds both a percentage and an amount threshold agreed with the owner (common starting points: 10% against budget, 15% against last year, plus an amount that matters at this business's size). Rank by absolute amount. Five well-explained variances beat twenty listed ones.
5. Decompose each material variance into causes, with amounts. Revenue into volume, price and mix; payroll into headcount, rate and timing; overheads into timing (will reverse), one-off (will not recur) and run-rate (will continue). The decompositions sum to the total variance. Methods and examples: references/variance-commentary.md.
6. Balance sheet and cash. Movement in each main line since last month, a cash bridge from operating profit to the change in cash, debtor days and creditor days, aged debt over 60 days by name, and any balance that looks wrong (old suspense, a growing director's loan, negative payables).
7. KPIs for the month and the trend over 13 months: the owner's chosen set, each with target and a status.
8. Write the one-page summary last: headline (one sentence), 3 to 5 key points with numbers, cash position and runway, outlook for the year (on track, at risk, off track against the full-year budget, with the gap in money), and decisions or actions needed with owners and dates.
9. Tie it out: P&L net profit equals the ledger; balance sheet balances; the profit for the year to date equals the movement in retained earnings (allowing for dividends or drawings); cash equals the bank reconciliations; YTD equals the sum of months. Evaluate the workbook formulas and compare with Python.
10. Hand over for review. The owner (or their accountant, for a pack going to a lender or investors) reviews before anything goes out. You do not send it to third parties without the owner's go-ahead.

Worked example: September variance commentary

• Revenue 79,600 against a budget of 75,000 (+4,600, +6%).
  • Services +6,200: two projects started a month early. Timing; October will show the reverse.
  • Licences minus 1,600: one renewal slipped to October. Timing.
  • Year to date, revenue is 9,300 (1.4%) above budget.
• Payroll 34,650 against 32,000 (2,650 adverse).
  • Headcount effect +4,000: the developer joined in September rather than October.
  • Rate effect minus 1,350: average cost per head below budget.
  • Run-rate: the full-year payroll forecast rises by about 4,000.
• Marketing 5,100 against 4,000 (1,100 adverse): a trade-show deposit expensed in September that belongs in prepayments until March. Error; corrected in October; no change to the full year.
• Net profit 3,650 against a budget of 4,450: 800 adverse, fully explained by the lines above.
• Full-year outlook: year-to-date profit 24,700 against 40,050 budgeted; at risk by about 18,000 unless the Q4 licence renewals land as planned.
• Decision needed: the second sales hire planned for November (owner, by 20 Oct).

The one-page summary, in order

1. Headline: one sentence with profit against budget and the cash position.
2. Three to five key points, each with an amount and a cause, largest first.
3. Cash and working capital: cash, the change, debtor days, anything over 60 days by name.
4. Full-year outlook: year to date plus the remaining budget or forecast, against the full-year budget; on track, at risk or off track, with the gap in money.
5. Decisions needed: what, who, by when. A worked summary page is in references/pack-layout.md; the decomposition methods and the weak-versus-strong commentary table are in references/variance-commentary.md.

Timetable after the close

Day	Task
Close sign-off + 1	Map the trial balance, build the numbers, run the tie-out
+ 2	Decompose variances, draft commentary, build the balance sheet and cash pages
+ 3	Summary page; review with the owner; corrections
+ 4	Final pack to the board, lender or investors on the owner's go-ahead
If the close slips, the pack slips. Do not build on an unclosed month; anything issued early is labelled draft with the open items on the cover.

Output

• management-accounts-<YYYY-MM>.xlsx with sheets: Summary, P&L (month and YTD), Variance bridge, Balance sheet, Cash flow, Debtors and creditors, KPIs, Mapping, Checks.
• A memo of one to two pages, in this order: headline, key points, P&L commentary, cash and balance sheet, outlook, decisions needed.
• A show_card with the headline numbers: revenue, gross margin %, net profit vs budget, cash, runway, and the status of the full year.

Checks before you finish

• Mapped trial balance total equals the ledger; every account mapped once.
• P&L profit equals the ledger profit for the month and YTD.
• Balance sheet balances; YTD profit reconciles to retained earnings movement.
• Cash per pack equals reconciled bank balances.
• Every variance decomposition sums to the variance it explains.
• Every material variance has commentary with a cause and an amount; no commentary uses "timing" without saying what and when.
• Formulas evaluated and matched with Python.

Pitfalls

• Describing instead of explaining. "Revenue was 12% above budget" is a number; "two projects started a month early, adding 18,000; this pulls revenue forward from November" is an explanation.
• Burying the headline. The owner should know the answer from the first sentence.
• Too many variances. Explain the material ones properly and group the rest.
• Mixing sign conventions between lines or pages.
• A pack from an unclosed month. Numbers will change and trust will drop. Close first, or label it draft.
• No outlook. A pack that does not say what the month means for the year is only history.

See also

• month-end-close, finance-kpi-dashboard, financial-statements-explained.